Opinion: Apple needs a handle on App Store paid-upgrade problem

In late August, The Omni Group, makers of many popular Mac productivity apps and a fixture of the Apple scene from the early days of OS X, announced a tool that would scour a user’s hard drive looking for copies of the company’s software purchased from the Mac App Store.

This software, dubbed OmniKeyMaster, would then turn Mac App Store receipts into Omni’s own licenses, thus giving users access to the company’s upgrade pricing options—which are not normally available through Apple’s sales channel.

Alas, it now seems that the folks from Cupertino have, at least for now, put a damper on Omni’s goals. In a blog post published on Wednesday, Omni CEO Ken Case announced that OmniKeyMaster has been shelved due to complaints from Apple.

Golden gates

Predictably, the news of OmniKeyMaster’s demise has been met with a mix of concern and ire by the blogosphere, mostly (but, surprisingly, not entirely) aimed at Apple. Cupertino’s restrictions imposed on developers who wish to sell through the App Store has caused all sorts of upheaval in the app development world in recent years, and long-time software makers have been forced to either adapt or face the consequences of foregoing a large market for their products.

My feelings are a bit more mixed. It’s always hard to analyze something when you only hear half the story, as is almost always the case with anything related to Apple. And, while it’s easy to assign any number of malicious intents to the company, the suggestion that it isn’t fan of a tool like OmniKeyMaster really isn’t a surprise, given that one of the app’s effects would surely be to take customers away from what the tech giant considers the proper, modern way of purchasing and distributing software.

The Omni Group's Mac App Store offerings generally command a premium price, which is one reason upgrade pricing is attractive to its customers.

Nor is it hard to understand Omni’s motivation for wanting to try and circumvent the App Store’s lack of paid upgrades, a practice that has been a staple of software sales for many decades. Omni’s tool didn’t really do anything nefarious—it was entirely an opt-in experience. Rather than an underhanded attempt at stealing customers away from Apple, it seems to me that Omni was simply trying to strike a balance between the need to generate revenues and keeping its customers happy.

A conflict for the ages

Frankly, I don’t think that either Apple’s or Omni’s motives are the really interesting story here. Instead, what piques my curiosity is the conflict that the App Store has created between Cupertino and the software developer community.

Historically, Apple has attempted to shift the balance of the personal computing market, making customers place a premium on hardware while expecting software to be cheap and plentiful. This plays well to the company’s strengths, which are making beautiful and powerful products that command a premium price and are difficult for its competition to replicate. By using a small portion of the money it makes by selling hardware to subsidize its software development, Apple has placed a significant amount of pressure on the rest of the PC industry, where hardware is commoditized and many companies have relied on software to bring in the lion’s share of the profits.

A major OS X update used to cost $130. Now, it's a fraction of that.

Thus, the price of practically every one of Apple’s software products, from OS X to professional tools like Logic, has decreased dramatically over the years, and the App Store has put a significant downwards pressure on the pricing of third-party apps for both the company’s desktop and mobile operating systems.

From a user’s perspective, this is a compelling reason to buy into Apple’s ecosystem: a slightly higher initial investment gets you great hardware and a veritable treasure trove of software at very reasonable prices. Better yet, the entire purchase process is simple, requires little effort, and does away with all the complexities of upgrade pricing (like, say, digging your old license files out of whatever hole they managed to crawl into).

Developers, developers, developers

From a developer’s point of view, transitioning to this new model can take considerable effort—particularly if, like Omni, you have been around for many years and cater to a considerable user base. The issue is not necessarily pricing or greed—if anything, Omni could simply do away with upgrade pricing altogether, shrug its corporate shoulders, and blame Apple for the change.

Rather, the issue is that Apple has not offered third-party developers any viable compromise that would allow them to transition from the traditional upgrade model, in which newcomers pay a higher price and then enjoy lower-cost upgrades, to a new world in which everybody pays the same (potentially lower) price for major releases, and minor updates are free.

Thus, developers are stuck catering to two distinct markets: one that expects upgrade pricing, and one that doesn’t. Trying to satisfy the needs of both is bound to cause significant conflicts until either the App Store fades into the mists of time or upgrade pricing is no longer the norm outside … neither of which is likely to happen anytime soon.

Upgrade pricing is cost effective for many users, and is unlikely to disappear anytime soon.

In a previous opinion article for Macworld, I argued that, as consumers, we are better off without upgrade pricing. I still think that’s the case, and I think that, in the long run, a simpler sales model would benefit developers as well.

In the meantime, however, Apple needs to step up to the plate and lead developers into this new model through a combination of customer education and improved sales tools, instead of simply forcing them to accept the arbitrary reality it wants to impose. Otherwise, some of the most prolific app developers will end up being driven away from the App Store—a scenario that would benefit no-one.